Schwarzenegger's legacy - What can governor do in his last year?

Gov. Schwarzenegger is one of the least popular governors in California history. His relationships with the Democrats who control the Legislature are lousy, and his rapport with his fellow Republicans is probably worse.

He is under constant attack from interest groups on the left and the right, and his policy agenda has been skunked in two special elections in the past four years.

With only 14 months left in his second and final term, he looks like the lamest of lame ducks, with few allies, little leverage and slim chances of accomplishing much as his political clock ticks down toward zero.

But if Schwarzenegger has the will, there are still ways for him to get things done. The job of California governor is a powerful one, and Schwarzenegger still has assets, including his worldwide celebrity, at his disposal.

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He has the power to sign and veto bills, delete individual items from the budget, appoint people to key jobs and change state government through executive orders. Regulators he chooses and can replace still hold sway over vast swaths of state policy and the economy.

And while he has to deal with a Democrat- dominated Legislature, Schwarzenegger could find a warmer reception there than other outgoing governors because, as a naturalized citizen, he cannot run for president, and he seems almost certain not to seek any other office. He therefore poses little threat to Democrats as a potential competitor.

Schwarzenegger hasn't said yet what he hopes to accomplish in his final year in office. But conversations with aides suggest that he will use those last months as a way to try to nail down many of the policy initiatives he began earlier in his tenure. On the environment, education, prisons, infrastructure and political reform, the governor has no shortage of unfinished business.

If Schwarzenegger does go out with a flourish, there would be precedent for it. The last time California had a lame duck governor, Republican Pete Wilson in 1998, he wielded his powers aggressively to the end. Wilson placed measures on the ballot that passed after he left office. And he used his line-item veto to blue-pencil $1.5 billion from his final budget, then offered to restore some of the money if legislators would help him achieve some of his priorities. John Burton, the Senate leader at the time, called it "extortion." But Wilson did get some of what he wanted.

"A governor's power over the budget does not go away in his final year in office," says Joe Rodota, who was Wilson's deputy chief of staff. "He always has that."

Rodota advised Wilson on how to maximize his executive powers, and when Schwarzenegger took office six years ago, the aide prepared a primer on the powers of the position for the rookie politician. That notebook might come in handy now that Schwarzenegger is looking for every opportunity to make the most of his weak hand. A recent Field Poll showed that only 27 percent of registered voters approve of the job he is doing. That's a record of futility surpassed only by Schwarzenegger's immediate predecessor, Gray Davis, just before the Austrian-born actor ousted Davis in a 2003 recall election.

Schwarzenegger took a major step last week that could set the stage for greater cooperation with the Legislature in the weeks ahead. He and bipartisan majorities in the Assembly and Senate agreed on a historic water deal that is designed to ensure the state's supply into the future while restoring and preserving the fragile and threatened Sacramento-San Joaquin Delta. The agreement includes $11 billion in bonds to help pay for water recycling, drought relief, new storage and wastewater treatment.

If approved by the voters next year, the bonds would cap one of Schwarzenegger's most visible legacies: a massive investment in the state's public works infrastructure. In 2006, he helped broker a bipartisan deal to place $37 billion in bonds on the ballot to repair levees and build more schools, housing and highways. Last year he supported a bond measure to help finance a high-speed train that will eventually carry passengers from San Diego to San Francisco.

The water agreement came after months of intense negotiations that involved not only partisan differences but splits among environmentalists and business interests and geographic divisions between Northern and Southern California and the San Joaquin Valley versus the Bay Area. There is hope in some circles in the Capitol that the connections forged overcoming those obstacles will carry over into negotiations on other difficult issues in the months ahead.

What else might Schwarzenegger do if he has the opportunity?

After water, his biggest unfinished business is probably education reform. Schwarzenegger once said that 2008 was going to be his "year of education," but with the budget in tatters, he set that priority aside. The state's fiscal situation is hardly any better today, but the governor has formed a tenuous alliance with Senate Democrats that could open the door to some significant changes. That's more likely now that the Obama administration has staked out a centrist path on the issue and is dangling federal funds in front of states that move aggressively to help low-achieving children.

Schwarzenegger is pushing to lift the state's cap on charter schools, which are campuses run by parents and teachers free from most state regulations. He also wants to make it easier for parents to move their children out of troubled schools, and he wants to reward teachers who work in the toughest jobs. The Senate passed most of what he wanted in September, but the legislation died in the Assembly. If the Legislature does not pass his plan by the time the next budget is resolved, look for the governor to make his proposed reforms part of those negotiations.

Schwarzenegger also found common ground with the Senate on prison reform. He agreed with lawmakers in the upper house on a plan to create an independent sentencing commission to examine the state's criminal justice system with an eye toward maximizing prison space for hard-core offenders while sending criminals with lesser violations to county jails. The Assembly blocked the plan, but Schwarzenegger is still trying to meet a court order to reduce the state's prison population, and this is an issue to which he will probably be forced to return.

The Republican governor is also looking to lock in his environmental legacy. One of his proudest achievements has been the passage of Assembly Bill 32, which set California on a course to reduce greenhouse gas emissions to 1990 levels by 2020.

The Air Resources Board, whose members Schwarzenegger appoints, is working on a plan to create a market-based system for firms to obtain and trade credits that will allow them a certain amount of emissions. The governor believes this is the most efficient way to reduce greenhouse gases without hurting the economy. But Democrats are skeptical of the approach and have always preferred more direct regulation, while one of the Republican candidates for governor, Meg Whitman, has vowed to suspend the law if she is elected. Schwarzenegger will try to have that program as far along as possible so the next governor will find it difficult to undo.

One big question is how much energy Schwarzenegger will put into his final months in office. With the budget mess still grinding him down and his wife and children still living in Los Angeles, many in the Capitol are speculating that the governor will lose interest in the job and let his priorities drift.

His attention has wandered before, and as his aides start to flee to other jobs and as more bad news inundates his office, Schwarzenegger might be tempted to pack it in prematurely. With his record in office already dotted by many difficult defeats, the governor will need all his energy to avoid a final year in which the Legislature repeatedly challenges his authority, or worse, simply tries to ignore him.

But his chief of staff, Susan Kennedy, has been telling friends that she is convinced her boss will keep his focus until the end — and she wouldn't still be working for him if she didn't think that was the case.

"He's the only politician I would ever consider staying for until the very end," Kennedy told me recently. "He's genetically incapable of slowing down."